The publisher of Andrew Marr's best-selling book A History of Modern Britain has agreed to pay "significant" compensation to a women's rights campaigner after it incorrectly linked her to a terrorist group.

A History of Modern Britain, based on Marr's BBC show of the same name, falsely suggested Erin Pizzey was a "cadet enthusiast" of Britain's terror group, the Angry Brigade, and had only broken with the group over its plan to bomb the Kensington boutique, Biba, in May 1971.

In a statement at the high court yesterday, Marr's publisher, Macmillan, accepted that the allegations were "entirely without foundation" and apologised for the "distress and embarrassment" they caused.

All unsold copies of the book have been recalled and the allegations will be removed from future editions. Macmillan also agreed to pay an undisclosed "significant sum" to Pizzey to "compensate her for the distress and embarrassment that she has suffered".

"I am both relieved and delighted that this matter has now been amicably resolved," Pizzey said.

In 1972 Pizzey opened the country's first women's refuge on Belmont Terrace in Chiswick, west London, and has since campaigned to raise awareness of domestic violence.